Ledger unveils crypto loans at TOKEN2049, letting users borrow stablecoins against cbBTC and wBTC from their hardware wallet

Ledger is moving from storing crypto to lending against it. At TOKEN2049 in Singapore on Wednesday, the hardware wallet maker launched Crypto Loan, which lets users borrow USDC or USDT against wrapped bitcoin (cbBTC and wBTC) from inside Ledger Wallet, with every transaction approved on their Ledger device.

Morpho powers the lending infrastructure

The new Bitcoin loans product is powered by Morpho, a decentralized lending protocol, with technical infrastructure provided by Yield.xyz.

The arrangement is significant because it connects Ledger’s large hardware-wallet user base to established decentralized lending infrastructure without requiring users to navigate the typical collection of separate DeFi applications, browser extensions and software wallets.

Ledger has also introduced direct access to Morpho through its hardware signers. The integration allows users to connect their Ledger devices to the lending protocol without relying on browser extensions or intermediary software wallets for the connection.

Morpho co-founder Paul Frambot described the relationship as a potential “powerful liquidity flywheel,” pointing to the interaction between Ledger’s existing financial products and its new lending offering.

The idea is straightforward: stablecoins supplied through Ledger’s Earn product can potentially provide liquidity for borrowers seeking Bitcoin loans, creating a link between users looking to earn yield and Bitcoin holders looking to borrow.

For Ledger, the development represents a broader shift from simply securing digital assets toward providing access to financial services built around those assets.

Bitcoin lending becomes a bigger crypto battleground

Ledger’s move comes as Bitcoin loans become increasingly prominent among major crypto and financial companies.

Coinbase has also expanded its Bitcoin-backed borrowing offering, including fixed-rate loans powered by Morpho. The exchange’s expansion into lending reflects growing demand from investors who want to retain their crypto positions while accessing traditional-style liquidity.

Traditional financial institutions are exploring the same concept. JPMorgan has investigated lending against digital assets including Bitcoin and Ethereum, signaling that crypto-backed credit is moving beyond the boundaries of decentralized finance.

The underlying proposition is attractive to long-term holders. An investor who believes Bitcoin could appreciate may prefer borrowing against an asset rather than selling it outright. Selling can end an investor’s exposure to potential upside and, depending on the jurisdiction and circumstances, may create a taxable event.

Borrowing against Bitcoin can therefore provide a way to obtain liquidity while maintaining exposure to the underlying asset.

But the strategy comes with substantial risk.

If Bitcoin falls sharply, the value of the collateral supporting Bitcoin loans can decline rapidly. Depending on the terms and collateralization requirements, borrowers may need to add more collateral or face liquidation.

That makes loan-to-value monitoring particularly important. A position that appears comfortably collateralized during a strong market can become vulnerable during a sudden crypto sell-off.

Ledger pushes deeper into crypto financial services

The launch places Ledger in an increasingly competitive market where exchanges, DeFi protocols and traditional banks are all exploring crypto-backed credit.

Ledger says it secures nearly 30% of the Bitcoin held by retail investors, giving the company a potentially significant distribution channel for its new financial products. Bringing Bitcoin loans directly into its wallet could allow Ledger to monetize its existing user base while keeping the hardware device at the center of transactions.

The company also used its TOKEN2049 appearance to unveil a limited-edition Nano Gen5 signer created with the NBA’s San Antonio Spurs. Only 250 units are being produced as part of Ledger’s ongoing partnership with the basketball franchise.

The broader message from Ledger is clear: hardware wallets are increasingly becoming gateways to financial activity rather than simply devices for storing private keys.

For Bitcoin holders, Bitcoin loans offer another way to put dormant holdings to work without immediately exiting their positions. For Ledger, the launch represents another step toward turning self-custody into an active financial ecosystem.

Crypto Loan is beginning its rollout to eligible users, with availability expected to expand over time. As decentralized lending matures and institutional interest in digital-asset collateral grows, Ledger’s latest offering shows how borrowing against Bitcoin is becoming an increasingly mainstream component of the crypto financial landscape.